MPP JOURNAL for the week of April 30, 2021
Natural Gas in Ontario
Most of us are concerned about the cost of living, especially the cost of essentials such as heating our homes. If you pay the bills for a home that is fuelled with natural gas, you have probably noticed higher-than-usual bills in the last several months.
Like many other commodities, the competitive forces of supply and demand in a North America-wide market determine natural gas prices. Over the past few years, demand for natural gas has increased considerably as a result of strong Canadian and US economies and the construction of new electricity generation plants using natural gas.
And Ontario has to import more than 95 per cent of its natural gas from Western Canada and other producing regions, so we have no control over the commodity wholesale price.
The efforts to increase supply have not yet caught up to the growing demand. The gap between supply and demand is the driving force behind the sharp increase in the wholesale price of natural gas. The good news is that drilling for gas in North America is at an all-time high right now. As more supply becomes available, the upward pressure on wholesale prices is expected to ease off.
The Ontario Energy Board, or OEB, is an independent agency that regulates the natural gas and electricity sectors in the province. The OEB does not allow utilities to make a profit on the gas they buy from suppliers and then re-sell to customers. They-re allowed to bill customers only for the cost of natural gas supplied plus the cost of delivery. If your gas utility was not allowed to pass along basic costs, the reliability and safety of gas distribution in Ontario would eventually suffer.
Since the deregulation of the natural gas industry in Canada 15 years ago, Ontarians have enjoyed low natural gas prices. Today's higher prices, combined with the coldest winter in three years, have made homeowners more aware of energy consumption. Fortunately, there are a number of ways to help combat high heating costs.
The most obvious is to use less gas. Your utility has probably included some tips with your bills on ways to prevent heat loss in your home, or call and ask for information on how to save money on your home heating bill. There is a wealth of material on ways to reduce energy consumption.
You can consider changing your gas supplier. Independent gas marketers can offer customers a commodity contract, at unregulated prices and with different terms - such as a certain length of contract (usually between one and three years), and the price you pay for the gas during that period.
You'll need to do your homework, through: make sure you are dealing with a company that is licensed to the OEB (10877-632-2727). And don't sign anything until you have an opportunity to study the contract carefully and compare it to your current charges. Don't forget about any separate charges you have for rented equipment, such as a water heater, of r a service contract that pays for furnace repairs.
And lastly, if you're thinking of switching suppliers, consider whether or not you'll be locking in at high prices that may decline as more gas supply is developed and produced.
Energy efficiency is a responsible way for homeowners to save money, conserve our natural resources and protect our environment.
David Tilson, MPP Dufferin-Peel-Wellington-Grey
244 Broadway, Orangeville, ON L9W 1K5
Phone: (519) 941-7751 Toll Free: 1-800-265-1603 Fax: (519) 941-3246